All of the following are systems that support the sale of insurance through agents and brokers EXCEPT

Fraternal Benefit Society System

What is a participating life insurance policy?

Contract that allows the policyowner to receive a share of surplus in the form of policy dividends

Which of the following is NOT a benefit of insurance?

Losses due to fraud are eliminated

Which entity has as one of its objectives preserving state regulation of insurance?

National Association of Insurance Commissioners

Which of the following statements regarding types of insurers is NOT correct?

Reinsurers usually deal with group policyowners.

Explain the difference between what a general agent does as compared to a PPGA?

PPGA's primarily sell. General agents primarily recruit, train, and manage.

What is the purpose of insurance?

To replace the uncertainty of risk with guarantees

Which of the following statements is correct when comparing participating policies with non-participating policies?

Premiums for participating policies are usually higher than for non-participating policies

Participating insurers allow their policyowners to

share in any company earnings and receive a dividend

Which of the following is NOT considered to be a definition of the term "loss"?

Probability that an event will occur

Which of these statements correctly describes risk?

Pure risk is the only insurable risk

Which of the following statements correctly describes a contract of indemnity?

One party is restored to the same financial position the party was In before the loss occurred

Which of the following is NOT a requirement of a contract?

Equal consideration is required between the involved parties

A unilateral contract is one in which

only one party (the insurer) makes any kind of legally enforceable promise

Which statement is CORRECT when describing a contract of adhesion?

Contract may be accepted or rejected by the insured

an offer and acceptance of the contract terms

Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated

1970 - Fair Credit Reporting Act

An agent is required to provide which of the following to the applicant when they make a proposal of insurance

Buyer's guide and policy summary

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Financial Test

Question	Answer
The State Guaranty Association Guarantees	That a claim will be paid if an insurer becomes insolvent
Nonparticipating insurers do not allow their policyowners to receive the following	dividends
All of the following are systems that support the sale of insurance through agents and brokers EXCEPT	Fraternal Benefit Society System
What is a participating life insurance policy?	Contract that allows the policyowner to receive a share of surplus in the form of policy dividends
Which of the following is a type of insurance where an insurer transfers loss exposures from policies written for its insureds?	Reinsurance
Which of the following is an insurer established by a parent company for the purpose of insuring the parent company's loss exposure?	Captive insurer
A participating company is also referred to as which type of insurer?	Mutual insurer
Which of the following is NOT a benefit of insurance?	Losses due to fraud are eliminated
Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event?	Insurance contract
John has an insurance policy that gives him the right to share in the insurer's surplus. What kind of policy is this?	Participating
Mutual insurers pay dividends to participating policyowners if the insurer has which of the following?	Divisible surplus
Which entity has as one of its objectives preserving state regulation of insurance?	National Association of Insurance Commissioners
Which of the following statements regarding types of insurers is NOT correct?	Reinsurers usually deal with group policyowners.
Explain the difference between what a general agent does as compared to a PPGA?	PPGA's primarily sell. General agents primarily recruit, train, and manage.
All the following types of insurance companies may be approved to operate in nearly all states EXCEPT	Lloyds of London
What is the purpose of insurance?	To replace the uncertainty of risk with guarantees
Which title can a life insurance agent use when conducting business?	Broker
Which of the following statements is correct when comparing participating policies with non-participating policies?	Premiums for participating policies are usually higher than for non-participating policies
All of the following methods support the sale of insurance through agents EXCEPT	Direct selling
A life insurance company that shares its suplus earnings with its insureds is known as	a participating company
Participating insurers allow their policyowners to	share in any company earnings and receive a dividend
A situation in which there is ONLY a chance of loss or no loss is a	pure risk
All of the following circumstances must be met for loss retention to be an effective risk management technique EXCEPT	Probability of loss is unknown
Restoring an insured to the same condition as before a loss is known as	Principle of indemnity
Which of the following describes the statement "The more times an event is repeated, the more predictable the outcome becomes"?	Law of large numbers
Which of the following is NOT considered to be a definition of the term "loss"?	Probability that an event will occur
Which of these statements correctly describes risk?	Pure risk is the only insurable risk
Which type of risk is gambling?	Speculative risk
Which of the following is considered to be a situation that has the potential for loss?	Loss exposure
Which of the following is NOT an element of an insurable risk?	Loss must be catastrophic
Which of the following would NOT be accomplished with the purchase of an insurance policy?	Risk is eliminated
Which of the following refers to a condition that may increase the chance of a loss?	Hazard
Which of the following describes the increase in the probability of a loss due to an insured's dishonest tendencies?	Moral hazard
Which of the following is NOT considered a definition of risk?	The cause of a loss
Who is considered the owner of a mutual insurance company?	Policyholders
Which of the following statements correctly describes a contract of indemnity?	One party is restored to the same financial position the party was In before the loss occurred
Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"?	Indemnity contract
Which of the following is NOT a requirement of a contract?	Equal consideration is required between the involved parties
Which principle is accurately described with the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss"?	Indemnity
A unilateral contract is one in which	only one party (the insurer) makes any kind of legally enforceable promise
The importance of a representation is demonstrated in what rule?	Materiality of concealment
Which course of action is the insurer entitled to when deliberate concealment is committed by the insured?	Rescinding the contract
Which statement is CORRECT when describing a contract of adhesion?	Contract may be accepted or rejected by the insured
A contract requires	an offer and acceptance of the contract terms
Which of the following is NOT required in the content of a policy?	Probability of loss
Which of the following requires insurers to disclose when an applicant's consumer or credit history is being investigated	1970 - Fair Credit Reporting Act
An agent is required to provide which of the following to the applicant when they make a proposal of insurance	Buyer's guide and policy summary
Dividends from a stock company are paid to stockholders, whereas in a mutual company dividends are	paid to the policyowners
Companies that sell more than one type of insurance are	multi-line insurers
John and Mary have a handicapped child that is financially dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both likely would be. Which policy would be best suited for them?	Second-to-die policy
An insurance policy written after 1988 that fails to pass the seven-pay test is known as	a modified endowment contract
What is the proper order of initial life insurance premiums, from lowest to highest?	Modified premium, ordinary life, single premium
In a renewable term life insurance policy, the contract will usually	require a higher premium payable at each renewal
Which of the following is NOT a true description of non-medical life insurance?	Applicants are not required to answer medical questions on the application
A life insurance policy's limit of liability would be	the policy's face amount
Which of the following is NOT true regarding a family policy that covers children?	Conversion of child's coverage to permanent insurance requires evidence of insurability
A life insurance policy where the insured can choose where the cash value can be invested is called	variable life
Variable life	allows the insured to choose where the assets backing the cash value are invested.
A life insurance policy that pays the face amount if the insured survives to a specified period of time is called	endowment insurance
Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for taking a loan against this policy prior to age 59 1/2?	10%
In a modified endowment contract, the penalty tax imposed on withdrawals is	10%
Which of the following types of life insurance combines a savings element along with a flexible premium option?	Universal life
Which of the following is a life insurance policy that does NOT require a physical exam?	Non-medical
Which of the following statements do NOT apply to child coverage in a family policy?	Only children born prior to policy's issue date may be included
Which of the following types of life insurance is normally associated with a mortgage loan?	Decreasing term
When does a life insurance policy's waiver of premium take effect?	Insured becomes totally disabled
When a life insurance policy is surrendered, how does the cost recovery rule apply?	The policy's cost basis is exempt from taxation
How are acts of war considered under a group life insurance policy?	Policy exclusion
A life insurance policy can be surrendered for its cash value under which policy provision?	Nonforfeiture options
Which statement is true regarding policy dividends?	A dividend option is selected by the insured at the time of policy purchase
An insurer can be protected from adverse selection with which policy provision?	Suicide clause
Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit be calculated?	12/15th of the policy's face amount
When an accidental death benefit is added to a whole life policy, how does this affect the policy's cash value?	Policy's cash value is not affected
After a policy has lapsed, which provision allows the insured to continue coverage?	Reinstatement provision
What are collateral assignments normally associated with?	Bank loans
In a life insurance policy, the entire contract consists of the	policy and attached application
Which of these is NOT a valid policy dividend option?	Monthly income payments
What does the grace period allow a life insurance policy-owner to do?	Make a premium payment after the due date without any loss of coverage
What does the guaranteed insurability option allow an insured to do?	Purchase additional coverage with no evidence of insurability required
Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness?	Accelerated death benefit
Pam is the primary beneficiary of a life insurance policy and wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should she choose?	Interest Option
A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen?	The insured's estate
How are death benefits that are received by a beneficiary normally treated for tax purposes?	Exempt from federal income taxes
Which of the following is NOT a life insurance settlement option?	Extended term option
When calculating life insurance premium rates, which component would an agent's commission fall under?	Insurer's expenses
Premiums are best described as	money paid by the insured to acquire a policy's benefits
When calculating life insurance premium rates, which component is affected by an insured's age and gender?	Mortality
Which of the following is NOT a component of determining policy premiums?	Dividends
Which of the following describes the number of deaths in a year compared to the number of people in a select group?	Mortality rate
The probability of death, listed by year, are demonstrated in	mortality tables
Part 3 of the application contains what?	The agent's report of personal observations about the insured.
What risk classification rewards exceptionally good risks which will result in premium rates that are lower than standard risk?	Preferred risk
When an insurance company requests an attending physician's report, the request must be accompanied by a	copy of the signed authorization
What are members of the Medical Information Bureau (MIB) required to report?	Medical ailments discovered during the underwriting process
Most U.S. life insurance companies belong to the	Medical Information Bureau
How does a conditional receipt differ from a binding receipt?	Binding receipts always provide insurance which starts from the date of receipt
Which of the following life insurance classifications charges the highest premium?	Substandard
The Medical Information Bureau consists of	life and health insurance companies
Which of the following types of information is NOT required for a life insurance application?	Ethnicity
When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called	underwriting
Which of the following statements regarding the Fair Credit Reporting Act (FCRA) is CORRECT?	Applicants must be notified within a short period of time that their credit report has been requested.
An agent's report (Part III of the application) provides additional information about the	applicant's financial condition, character, purpose of the sale, how long the agent has known the applicant
All of the following employees would normally be excluded from a group term life plan EXCEPT	A full-time employee who has been on the job 2 years
Tim was recently terminated from his employment and opted to change his existing group term life insurance to individual permanent life insurance. What is this process called?	Conversion
Which of the following is NOT a requirement for a terminated employee that has exercised the conversion privilege?	Provide proof of insurability
Which of the following is NOT a characteristic of the conversion privilege?	Employer pays the premium for the converted policy
All of the following are considered characteristics of group life insurance EXCEPT	individual policies
A terminated employee that has exercised the conversion privilege is able to convert	term group life coverage into permanent insurance
How is the cost of employer-provided group life insurance with coverage amounts above $50,000 treated for tax purposes?	Taxable income to the employee
Which of the following describes a contributory group insurance plan?	Part of the premium is paid by the employee
Who is issued a certificate of insurance with a group insurance policy?	Participant
How does underwriting differ between group life and individual life insurance?	Medical questions must be answered on individual life insurance
In an employer group plan, what is the name of the policy issued to the employer?	Master contract
Which of the following statements regarding equity index contract factors is most CORRECT?	Cash values of equity index contracts typically grow at a minimum interest rate.
Premium paid for a variable annuity less expenses equal which of the following?	Accumulation units
During the payout period of an annuity, the interest portion of the payment is	taxed as ordinary income
The monthly amount of benefit an annuitant receives is based on all of the following factors EXCEPT the	exclusion ratio applied
Variable annuity sales are subject to which of the following regulations?	SEC and state regulation
Which of the following is NOT a feature of equity-indexed annuities?	Offers a maximum interest rate that increases annually
What distinguishes a deferred annuity from an immediate annuity?	The time at which benefit payments start
The systematic liquidation of a sum of money is provided by a(n)	annuity
An annuity which is backed by a life insurer's separate account is called a(n)	variable annuity
Joanna and her husband, Tom, have a $40,000 annuity that pays them $200 a month. Tom dies and Joanna continues receiving the $200 monthly check as long as she lives. When Joanna dies, the annuity payments cease. This is an example of	a joint and full survivor annuity
Which of the following is a fair comparison between life insurance and annuities?	Both life insurance and annuities use mortality tables.
In a cash refund option, if the annuitant dies before the annuity fund is depleted, where does the balance go?	Beneficiary
The purpose of the exclusion ratio is to	allocate principal and interest, so to properly determine taxable and non-taxable amounts that are paid to annuitants
Variable annuity payouts are adjusted based upon which of the following?	Annuity units
State insurance laws generally allow a number of groups to hold blanket life insurance policies, all of the following are examples of groups eligible for blanket life insurance EXCEPT	A start up company to cover it’s employees health insurance needs.
All of the following statements regarding annuities are correct	Annuities are sold by life insurance agents, An annuity is a periodic payment, Annuitants can pay the annuity premiums in lump sums
When a cash value life insurance policy is converted into an annuity in a nontaxable transaction, that event is generally known as	a 1035 exchange
The interest credited to an equity indexed annuity is tied to increases in	a specific equity or stock index
In a straight life income option, if the annuitant dies before the annuity fund is depleted, where does the balance go?	Insurer
At what age is a surviving spouse without dependents eligible for Social Security survivor benefits?	60
A worker is entitled to Social Security disability benefits if all of the following are true	worker is under age 65, worker is insured for disability benefits, disability is expected to continue for 12 months or result in death
How long is a person expected to be disabled in order to receive Social Security disability benefits?	12 months
Who is eligible for Social Security survivor benefits?	A widow at any age who is caring for children younger than 16, A widow at full retirement age, Full-time students under the age of 19
Which of these factors affects the Social Security normal retirement age?	Year in which worker was born
In order to be considered "currently insured" under Social Security, an individual must be credited with	6 quarters of coverage during the last 13-quarter period
What is considered to be the definition of disability, according to Social Security?	Unable to engage in any substantial gainful activity (SGA).
According to Social Security, an individual with 6 credits of coverage during the previous 13-quarter period is considered to be	currently insured and eligible for limited survivor benefits, you must have 6 credits of coverage during the last 13-quarter period.
An individual that has 40 quarters of coverage, for Social Security purposes, is considered to be	Fully insured.
Which type of worker has Social Security benefits available to them?	Fully insured
ESOPs are typically invested in	employer stock
What area of group health insurance is regulated under the Employee Retirement Security Act of 1974 (ERISA)?	Disclosure and reporting
How are Roth IRA's treated for tax purposes?	Non-deductible contributions and tax-free distributions
What does ESOP stand for?	Employee Stock Ownership Plan
Retirement plans are prevented from favoring highly compensated employees under which government regulation?	Nondiscrimination
All of these are examples of a business use for life insurance	Buy-sell funding, Key person, Partnership entity plan
Three individuals form a partnership with equal shares valued at $300,000. If they were persuaded to use an "entity" buy-sell plan funded with life insurance, how many policies and for what amounts would be purchased?	Three policies for $100,000 each
"Life insurance creates an immediate estate". This phrase means	when the insured dies, a death benefit is paid
Key person insurance is intended to	cover business losses due to the death of a key employee
Which of the following pieces of information is gathered during the personal financial planning process?	An individual's assets, An individual's expenses, An individual's income
Which of these requires an analysis of a family's financial needs and objectives should the breadwinner die or become disabled?	Needs Approach
What is the tax advantage of key-person life insurance?	Death proceeds are nontaxable
Which plan can be used as an incentive by an employer to help an employee buy life insurance?	Split-dollar plan
Under a partnership cross-purchase plan, when there are 4 partners how many policies are needed?	12
All of the following factors are used in the needs approach for determining the amount of required life insurance	the monthly income, the emergency fund period, the education fund
All of these are examples of a business use for life insurance	Buy-sell funding, Key person, Partnership entity plan
During the underwriting process for a group health policy, it was discovered that 15 out of 50 members of the group have major health issues. How would the insurer handle this?	Accept or reject the whole group
What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect?	100%
Who is financially liable for the payment of covered claims in a fully insured group health plan?	Insurer
Minimum participation standards exist for group health insurance plans in order to	prevent adverse selection
Business Overhead Expense Insurance pays for	business expenses when a business owner becomes disabled
What type of policy covers unusual hazards typically not covered under ordinary accident and health insurance?	Special risk policy
Which of the following is typically covered under vision care insurance?	Eyeglasses, Examinations, Contacts Retina surgery is not include
The problem of overinsurance is addressed in which health insurance provision?	Coordination of benefits
Buy-sell plans are typically funded by which two types of insurance?	Life insurance and disability insurance
Coverage is limited for vision and dental insurance in all of the following ways EXCEPT	Number of teeth cleanings per year, Dollar amount for eyeglass frames, Number of X-rays performed per year EXCEPT Specific dollar amount for examinations
Individual health insurance policies are typically written on which basis?	Non-Participating
Individuals become eligible for Medicare Part A benefits at what age?	65
Disabled workers are covered under Workers' Compensation medical expense benefits for how long?	No limit
Medicare Part B has an initial enrollment period. How many months after an individual's 65th birthday month does this enrollment period end?	3 months
Coverage for care received from a network provider pays more than care received from a non-network provider in what type of health plan?	Preferred Provider Organization (PPO)
At age 65, which of the following is available at no cost to all individuals?	Medicare Part A
Medicare Part A covers what type of care?	Skilled nursing facility care
How is a Medicare claim submitted?	Expenses are submitted to Medicare by the health provider
Which of the following does Medicare Part A provide coverage for?	Hospice, Hospitalization, Inpatient care not provide Doctor's services
Which statement regarding Medicare is true?	Benefits for diagnostic tests and X-rays performed on an outpatient basis are provided by Part B
Who acts as the gatekeeper in a Health Maintenance Organization (HMO)?	Primary care physician
An employee for XYZ Corp is injured on the job. Where does coverage for the employee's injuries come from?	Workers' Compensation
Which statement is TRUE regarding Workers' Compensation coverage	Employer pays the entire premium for Workers' Compensation coverage
Which of the following does specified disease insurance cover?	medical expenses that are noncovered, incidental costs, out-of-pocket expenses Not costs covered by medical expense insurance
Allen has a disability income policy with a $2,500 monthly benefit and a 30-day elimination period. He is unable to work 90 days following an automobile accident. What will the policy pay?	$5,000
What is the purpose of a Disability Income Benefit?	Provide money for living expenses
Which of the following is NOT included in comprehensive major medical plans?	First-dollar coverage
Medical expense policies will typically cover which of the following?	Injuries caused by accidents
When does an insured qualify for stop-loss coverage?	When claims exceed a specified limit in a set period of time
Which of these statements is true concerning recurrent disabilities?	The recurrence of a disability must occur within a specified time period after the prior disability, A recurrent disability is considered to be a continuation of the prior disability, The recurrent disability must be caused from the original disability.
What does a Hospital Confinement indemnity policy pay for?	Pays a specified daily amount while the insured is confined to a hospital
Which of the following terms is associated with a Major Medical policy?	Stop-loss, Comprehensive, Deductible not Capitation
What does the term coinsurance refer to?	After the deductible is satisfied, the percentage paid by the insured for the remaining covered expenses
From an insurance perspective, which of the following is the PRIMARY risk associated with disability?	Loss of income
Which disability policy provision would address any concerns of the value of the benefits decreasing over time?	Cost of living benefit
What is the elimination period of an individual disability policy?	Time period a disabled person must wait before benefits are paid
A disability elimination period is best described as a	time deductible
A rehabilitation benefit is intended to	prepare the insured to return to employment
Chris is an insured bricklayer and substitute high school who severed his left hand in an automobile accident so can't be performed. He collects a full disability income check every month. How does his policy define total disability?	Own occupation
Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium?	14 day waiting period / 10 year benefit period The disability income policy with the lowest waiting period and longest benefit period would have the highest premium.
What is the primary factor that determines the benefits paid under a disability income policy?	Wages
Loss of income insurance provides	an individual the means to replace wages
Coming from an insurance point of view, which of the following is the main risk associated with disability?	loss income
Which type of disability would be less than total impairment and equal to permanent impairment?	Permanent partial disabilty
An example of a presumptive disability would be	deafness
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?	Guaranteed insurability rider
Which clause defines total disability as being unable to perform the major duties of the insured's regular occupation?	Own occupation
Which of the following would be considered an activity of daily living under a long term care policy?	Bathing
Periodic increases in policy benefits are allowed in which long-term care policy provision?	Inflation protection
All of these statements concerning Medicare are true	Medicare is primarily funded by Federal payroll and self-employment taxes, Hospice is covered by Medicare Part A, Doctors' services are covered by Medicare Part B. Not Long-term care is covered by Medicare Part C
Which of the following plans will cover medical costs that Medicare doesn't cover?	Medicare supplement
Under a long-term care insurance policy, adult day care coverage will provide for	part time care at a facility for elderly individuals who live at home
Which of the following is a required uniform provision in individual health policies?	Legal Actions, Notice of claim, Reinstatement Not Change of occupation
The misstatement of age provision in a health policy states that if an insured gives the wrong age at the time of application, what action can the insurance company take?	Benefits can be adjusted
The conditions, times, and circumstances under which an insured is NOT covered by a health policy are called	exclusions
Under a health insurance policy, the provision that states the kind of benefits provided and the circumstances under which they will be paid is called the	insuring clause
Under the Payment of Claims provision, when are benefits typically payable after proof of loss is received?	Immediately
The insurer has the option of terminating a health insurance policy on a date stated in the contract. What type of policy is this?	Optionally renewable
Which type of health insurance policy cannot be canceled by the insurer nor increase the premiums?	Noncancellable
Christine has a health insurance policy that has been in force beyond the incontestable period. The insurer has discovered that a fraudulent statement . What would the insurer have to pay on a claim, assuming this wasn't a guaranteed renewable policy?	Nothing
A health insurance policy paid on a quarterly basis has a grace period of	31 days
What type of changes can be made to a guaranteed renewable health insurance policy?	The premium rates of the policyowner
In what situation does a waiver of premium provision keep a health insurance policy in force without premium payments?	When an insured becomes totally disabled
All of the following are primary risk factors in underwriting individual health insurance policies	Moral hazard, Occupation, Physical condition Not Geographical location
What is the effect of an impairment rider attached to a health insurance policy?	To exclude from coverage losses resulting from specified conditions
Major risk factors in health insurance underwriting include all of the following	Physical condition, Habits or lifestyle, Occupation Not Marital status
If a health insurance policy has lapsed and it is later reinstated, the reinstated policy will cover only sickness that begins	At least 10 days after the date of reinstatement
Which of the following statements BEST represents the tax status of personal disability income policies	Premiums are not deductible; benefits are tax-free
Which of these factors do NOT affect the rates of medical insurance?	race
Which of the following is NOT considered to be insurer expenses?	policy premiums
Which of the following is NOT a factor in determining the morbidity of a group of individuals?	race
What is the term used to describe the frequency and severity of certain illnesses and accidents?	Morbidity
Jim is the insured on a health insurance policy and holds 2 jobs. If "occupation" is used to classify the risk, the insurer will most likely classify Jim according to the occupation that	is most hazardous
Which of the following would probably NOT be considered in underwriting a health insurance risk?	Marital status
An increase in which factor will decrease the disability insurance premium?	Interest rate
The expected incidence of sickness or disability within a given group during a given period of time is	morbidity
Which of the following is covered by the Family and Medical Leave Act (FMLA)?	Pregnancy, Adoption, Attending to the serious health condition of a parent Not Traveling overseas with a spouse
Which of the following acts is a Federal offense committed by an insurance agent?	Embezzlement, Insurance fraud, Falsify records Not Misrepresentation on an insurance application
Which of the following is a primary objective of insurance regulation?	Insurance Code enforcement, Licensing agents, Protect policyowners Not Interpret policy provisions
Which type of jurisdiction requires an insurer to have its rates accepted by the Insurance Department prior to using them?	Prior acceptance
Where must you specifically reside to qualify for MRMIP?	California
What is the purpose of the Pre-Existing Condition Insurance Plan (PCIP)?	PCIP was created by the State of California for people rejected by private health insurers due to pre-existing conditions
MRMIP stands for	Major Risk Medical Insurance Program
In what order are people on the MRMIP waiting list allowed to enroll?	Based on the date an individual's application is received
What effect did the Pregnancy Discrimination Act have on the health industry?	Pregnancy must be treated as any other medical condition
Which of the following does the California Department of Insurance (CDI) have NO jurisdiction over?	Medicare
Who does a life settlement broker represent?	Individual wanting to sell their life policy to a third party
What is an insurance solicitor authorized to do?	Help an agent or broker sell insurance
An insurance company entitled to transact business in California is called a(n)	admitted carrier
When selling a long term care insurance rider to an applicant, a life agent must take into consideration all of these factors	Ability to pay, Needs of the client, Goals of the client Not Attending physician's statement
Which of the following does the California Insurance Code NOT require an insurance policy to specify?	Insurer's financial rating
A representation may be altered or withdrawn	only before the insurance is in effect
How many "activities of daily living" must an insured be UNABLE to perform in order to meet the chronically ill requirement of a Long-Term Care policy?	Minimum of two activities of daily living
A person who asserts a right of recovery under an insurance policy is called	claimant
Which of the following does have to be included on life insurance policy illustrations?	Age of the insured, Name of the agent, Name of the insurer Not Statement that all values and benefits are guaranteed
According to the California Insurance Code, what term is used to describe a fact so important it could affect the policy premium?	Materiality
Which of the following is considered to be an act of insurance solicitation?	An agency sending out direct mail for a promotion, An agent giving a rate quotation, Airing a television commercial recommending an insurance product Not Publishing a magazine where one of the advertisers is an insurer
According to PPACA, how long can an adult be covered as a dependent under their parents' insurance plan?	Up to age 26
How long must a policy be in force before an insurer is prohibited from denying claims based on misstatements made on the health policy application?	2 years
Anyone employed in California to assist an insurance agent in transacting insurance is called an insurance	solicitor
According to the California Insurance Code, what is the maximum penalty per violation for anyone who unwillfully commits an unfair method of competition?	$5,000
An agent's attempt to stop the replacement of an existing life insurance policy is known as	conservation
How long must life agents keep their transaction records?	5 years
Life insurance surplus must be distributed to policyowners at what frequency?	Annually
In California, the elderly can receive information about health related issues from	Health Insurance Counseling and Advocacy Program (HiCAP)
The cost of services charged by the Health Insurance Counseling Advocacy Program (HiCap) is	no cost
Which of the following is covered by the Family and Medical Leave Act (FMLA)?	Traveling overseas with a spouse
The California Insurance Code allows an individual how many days to cancel a life policy for a full-refund?	Between 10 and 30 days
What type of license is required for an individual who charges a fee to review an insured's existing life insurance policy?	Life and disability analyst
Which of the following is an accurate description of Access for Infants and Mothers Program (AIM)?	Eligibility is based on income, Low-cost health care coverage for pregnant women, Only women who have private insurance plans with a maternity-only deductible or copayment greater than $500 are eligible
In California, an insurer organized under the state laws of Oregon is called a(n)	foreign insurer
According to the California Insurance Code, how is the word "may" interpreted?	Permissive
What is an insurance solicitor authorized to do?	Help an agent or broker sell insurance
Which word implies permissiveness according to the California Insurance Code?	May
What does the term "illustration" mean when used in the phrase "life insurance policy illustration", according to the California Insurance Code?	Presentation of policy features that includes non-guaranteed elements
An individual who transacts life, disability, or life and accident and health insurance on behalf of an insurer is called a(n)	life agent
Which of the following is protected under the California Life and Health Guarantee Association?	Policyowners, Primary beneficiaries, Insureds Not Insurers
According to the PPACA, the medical enrollment tier that has 80% actuarial value is called	gold
According to the PPACA, an adult can be covered by a parent's health care plan until what age?	Age 26
What does the term "indemnity" mean as it pertains to insurance?	To make whole
According to the California Insurance Code, what is "insurance"?	A contract
The free-look period for life insurance policyowners age 60 or older is	30 days
According to PPACA, what is a health benefits exchange?	An entity to which individuals and small businesses can have access to affordable health coverage
Which of the following is NOT considered to be an unfair claims settlement practice?	Advising a claimant to hire an attorney
Which of the following actions is allowed by Health Insurance Counseling and Advocacy Program (HiCAP) counselors?	Medical record keeping assistance, Assist in policy evaluation, Assist in understanding Medicare Supplements Not Charge a fee
Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of?	Theft
People with low income can be provided with medical assistance through which program?	Medi-Cal
Paul has an existing annuity and is sold a new one, in which the new policy holds no greater financial benefit to him than the existing contract. This is considered a(n)	unnecessary replacement
The California Insurance Code requires that an insurer must have enough assets to cover its liabilities and for reinsurance of all outstanding risks. To remain solvent, it must also possess additional assets equal to what amount?.	Its paid-in capital
When an insurer has met the qualifications necessary to transact business in California, it is said to be	admitted
Jim is applying to become an insurance agent and has a past misdemeanor conviction that was later expunged due to California Penal Code 1203.4. Which of the following statements is correct?	Jim must still disclose the conviction on his insurance license application
What time period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date?	Grace period
Which policy provision protects the policyowner from unintentional lapse of the contract?	Grace period
Who is eligible for retirement benefits under Social Security?	Fully insured workers
How are Roth IRAs treated for tax purposes?	Non-deductible contributions and tax-free distributions
The California Insurance Code defines "policy" as a(n)	written contract
MRMIP is a	tate program that offers health coverage to California residents who are not able to obtain coverage due to pre-existing conditions
Both the Federal and state governments jointly finance which health insurance entitlement program?	Medi-Cal
An agent has advertised that the insurer to which the agent is appointed with is a member of the Insurance Guarantee Association. This agent has committed a(n)	unfair method of competition
Which entity has jurisdiction over health care coverage providers?	Department of Insurance
How is an agent's first year commission calculated for a replacement long-term policy?	Based on the difference between the new and original policy annual premiums
Before an insurer is allowed to test an individual for HIV, what must be completed?	Consent form
What is the insurance term the State of California uses for an insurer that is eligible to transact business in this state?	Admitted
When intentional concealment is involved, what course of action is the injured party entitled to?	Rescission of the contract
What is required after a life agent sells an insurance policy to an applicant without being appointed by the insurer?	Notice of appointment must be submitted to the Commissioner

Created by: huangyiken3

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